OmniAb, Inc. — Form 8-K Summary
Reporting date: October 24, 2022. The filing was submitted by Avista Public Acquisition Corp. II (APAC), the SPAC that expected to domesticate as a Delaware corporation and change its name to OmniAb, Inc. upon closing of its business combination with OmniAb, Inc., a subsidiary of Ligand Pharmaceuticals Incorporated.
Business Context and Transaction Status
APAC held an extraordinary general meeting on October 24, 2022. Shareholders approved the proposed business combination, the Cayman Islands-to-Delaware domestication, the new organizational documents, the related stock issuance, equity compensation plans, and the proposed post-closing board of directors.
The filing does not report operating results for OmniAb, including revenue, net income, cash flow, margins, debt, or liquidity balances.
Key Financial and Capitalization Matters
- Redemptions: Holders of 21,713,864 APAC Class A ordinary shares elected redemption at approximately $10.32 per share, for aggregate redemptions of $224,048,746.95.
- Redemption backstop: Under the amended and restated Forward Purchase Agreement, New OmniAb was expected to issue the Sponsor 8,672,934 common shares and 1,445,489 warrants for an aggregate purchase price of $86,729,340.
- Additional private placement: Immediately before the merger closing, New OmniAb was expected to issue the Sponsor 1,500,000 common shares and 1,666,667 warrants for $15,000,000.
- Incentive Award Plan: The initial share reserve was to equal 14% of New OmniAb’s fully diluted shares outstanding at closing, plus certain recycled shares. The reserve was also subject to annual increases through 2032 of up to 5% of prior-year fully diluted shares.
- Employee Stock Purchase Plan: The initial reserve was to equal 1.5% of fully diluted shares outstanding at closing, with annual increases through 2032 of up to 1% of prior-year fully diluted shares. No more than 100,000,000 shares could be issued under the Section 423 component, subject to plan adjustments.
Shareholder Vote and Material Changes
Shareholders representing 17,382,421 Class A shares and 5,750,000 Class B shares attended in person, virtually, or by proxy, representing 80.46% of shares outstanding and entitled to vote as of the September 1, 2022 record date.
| Proposal | Result | For | Against | Abstain |
|---|---|---|---|---|
| Business combination | Approved | 22,190,386 | 942,035 | 0 |
| Domestication and name change | Approved | 21,813,525 | 1,318,896 | 0 |
| Organizational documents | Approved | 21,813,525 | 1,318,896 | 0 |
| Stock issuance | Approved | 21,813,525 | 1,318,896 | 0 |
| Incentive Award Plan | Approved | 21,765,821 | 1,366,550 | 50 |
| Employee Stock Purchase Plan | Approved | 21,813,475 | 1,318,896 | 50 |
The approved governance changes included authorization for 1.0 billion shares of common stock and 100 million shares of preferred stock, a classified three-class board, specified supermajority voting requirements, restrictions on stockholder action by written consent, and Delaware as the exclusive forum for specified claims.
All seven proposed directors were elected to staggered terms. The adjournment proposal was not considered because sufficient votes were available to approve the other proposals.
Outlook, Risks, and Unusual Items
- Closing of the business combination remained subject to applicable closing conditions; approval at the meeting did not itself establish that closing had occurred.
- Management cautioned that the transaction could be delayed, terminated, or not completed, and that anticipated benefits might not be realized.
- Key cited risks included the reduced funds remaining in APAC’s trust account after redemptions, regulatory approvals, Nasdaq listing compliance, transaction costs, changes in the combined capital structure, securities-price volatility, execution of business plans, and OmniAb’s ability to implement strategic initiatives.
- The filing contains forward-looking statements regarding transaction timing, expected benefits, business plans, and future opportunities. The filing states that these statements are not guarantees and that the parties do not undertake to update them.
Investor Verification Points
- Verify whether and when the domestication and business combination actually closed, and confirm the final legal name and ticker symbols.
- Reconcile the $224.0 million of redemptions with the final trust-account balance, financing proceeds, and post-closing liquidity.
- Confirm the final number of shares and warrants issued under the redemption backstop and private placement, including resulting dilution.
- Review the definitive merger documents and subsequent filings for final closing conditions, transaction expenses, and any amendments.
- Assess the dilution from the 2022 Incentive Award Plan, ESPP, warrants, and other equity awards using the final fully diluted share count.
- Review the cited registration statements, proxy statement/prospectus, and risk factors for additional financial projections and business-combination risks not presented in this 8-K.